Several Stanford business school alumni pooled money through a new company called Social Financial to make private loans to current Stanford business students.
The company’s main selling point is that the interest rate on its loans is lower than that of unsubsidized federal loans and private loans. The company offers a 5.99 percent fixed interest rate, which is several basis points lower than unsubsidized Stafford loans, which carry an interest rate of 6.8 percent. The subsidized Stafford loans are also expected to increase to 6.8 percent on July 1.
Social Financial recently announced that it is expanding the program to 35 other universities.
